Upstart Earnings Beat Sparks Major Stock Rally
Upstart stock is scaling the charts Friday after the AI lending platform beat Q3 expectations on strong loan growth. Here's what you need to know.


Upstart (UPST) is one of the best stocks on Friday, up more than 40% at last check, after the artificial intelligence (AI) lending marketplace beat top- and bottom-line expectations for its third quarter and provided a stronger-than-anticipated outlook for its fourth quarter.
In the three months ended September 30, Upstart's revenue increased 20.5% year over year to $162.1 million, boosted by a 30% pop in transaction volume to $1.6 billion. Meanwhile, its net loss widened to 6 cents per share from 5 cents per share in the year-ago period.
"With 43% sequential growth in lending volume and a return to positive adjusted EBITDA [earnings before interest, taxes, depreciation and amortization], we continue to strengthen Upstart's position as the fintech leader in artificial intelligence," said Upstart CEO Dave Girouard in a statement. "Even without a significant boost from the macroeconomy, we're back in growth model."

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The results easily topped analysts' expectations. Wall Street was anticipating revenue of $150.2 million and a net loss of 15 cents per share, according to Yahoo Finance.
For the fourth quarter, Upstart expects to achieve revenue of approximately $180 million, well ahead of the $162.3 million in revenue analysts are anticipating.
"We're hopeful that we'll see macroeconomic wins in the quarters to come, but we're not waiting around for them," Girouard said. "Upstart's mission is simply to improve access to credit, and our strategies to accomplish this goal is to provide the best rates and best process to everybody."
Is Upstart stock a buy, sell or hold?
With Friday's post-earnings surge, Upstart is now up more than 95% for the year to date, but Wall Street remains on the sidelines when it comes to the financial stock.
According to S&P Global Market Intelligence, the average analyst target price for UPST stock is $40.19, representing a substantial discount to the current share price of nearly $80. Meanwhile, the consensus recommendation is Hold.
Financial services firm Needham is one of those with a Hold rating on the mid-cap stock.
"While we are constructive on UPST's growth trajectory over the medium term, we believe that it is still relatively early on in the days of a growth recovery," says Needham analyst Kyle Peterson. "While we expect there to be opportunities for growth investors to add UPST to their portfolios in the event of a pullback in the shares and/or increased conviction that estimates will continue to climb higher, we view the risk-reward as neutral at the current time."
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Joey Solitro is a freelance financial journalist at Kiplinger with more than a decade of experience. A longtime equity analyst, Joey has covered a range of industries for media outlets including The Motley Fool, Seeking Alpha, Market Realist, and TipRanks. Joey holds a bachelor's degree in business administration.
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